Market Jolt After the Fed- Rotation Over Rally?

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Markets delivered exactly what was forecasted: higher volatility. Following a relatively neutral start, equities rallied sharply after the FOMC meeting midweek before pulling back into Friday. While the S&P 500 struggled near prior highs, broader indices quietly broke out—with the Dow, Russell 2000, and S&P 500 Equal Weight all printing fresh all-time highs.

Volatility was driven by a dovish-leaning Fed, rising long-term yields, and renewed concerns around AI infrastructure spending, sparked by Oracle’s earnings and elevated CapEx guidance. Strong economic data and bullish seasonality remain supportive, but tech leadership is wobbling—forcing markets into a rotation-driven tug of war rather than a clean trend higher.

‎TLDR Stock Market Weekly Update - December 12, 2025

📉 Market Trends

• Rotation Over Concentration: Mega-cap tech showed weakness while equal-weight and small caps outperformed, signaling healthier internal market structure.

• AI Spending Scrutiny: Oracle’s jump in FY26 CapEx from $35B → $50B revived fears of AI overinvestment, weighing on semis and momentum stocks.

• Seasonality + Performance Chasing: Bullish year-end seasonality and potential Q4 performance chasing remain supportive tailwinds.

📊 Technical Levels & Market Signals

• S&P 500 Equal Weight (SPXEW):

  • Broke above ~7,800 resistance to fresh all-time highs

  • Key level to hold next week: 7,800

  • Near-term bias: Bullish if breakout holds

• Mega-Cap Tech:

  • Near-term fragile as AI narratives cool

  • Underperformance could persist without renewed catalysts

💰 Economic Data, Rates & the Fed

• FOMC Takeaway:

  • Fed cut rates by 25 bps (3.50–3.75%)

  • Dot plot now implies fewer future cuts, but stronger growth outlook

  • Market read the meeting as dovish overall

• Labor & Growth Signals:

  • JOLTs surprised higher → tighter labor conditions

  • GDPNow revised up to 3.6%, reinforcing growth resilience

• Rates:

  • Yield curve steepened

  • 30-year yields hit 3-month highs, pressuring tech valuations

Sources: Charles Schwab

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📅 Coming up next week…

Economic Events:

• Mon (12/15): Empire State Manufacturing, NAHB Housing Market Index

• Tue (12/16): Nonfarm Payrolls, Retail Sales, Unemployment Rate, Housing Starts, Industrial Production

• Wed (12/17): MBA Mortgage Applications, EIA Crude Oil Inventories, Business Inventories

• Thu (12/18): CPI, Jobless Claims, Philadelphia Fed Index, BOJ Rate Decision

Notable Earnings Reports:

• Mon (12/15): NAVN, USAU

• Tue (12/16): LEN, DLTH

• Wed (12/17): MU, GIS, JBL, VERU

• Thu (12/18): NKE, FDX, ACN, FCEL, BB

• Fri (12/19): CCL, PAYX, WGO

Sources: Earnings Whispers, Charles Schwab

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